July 2013 External Trade

Friday’s trade report was a pleasant surprise (log annual and monthly changes; seasonally adjusted):

[Note: I’m still using my old seasonally adjusted figures, even though DOS now issues there own. I’ll be shifting over to the official figures as and when I manage to find time to transfer the data in. The differences between the adjusted series does not substantively change the following analysis]

Both an annual and monthly basis, growth was much stronger than expected, and the first annual growth since January. Growth was across the board (log annual and monthly changes; seasonally adjusted):

LNG lead the charge, and even E&E exports are turning around (RM millions):

Imports on the other hand, continued to creep up (RM millions):

Now there are two ways to look at this. First, total exports really hasn’t changed much in the past couple of years (RM millions):

In that sense, the latest numbers don’t really signify anything but a normal monthly fluctuation around an unchanged average. Higher shipments could also be supported by a spurt of output before the beginning of Ramadhan.

On the other hand, the rising monthly trend in intermediate imports and in E&E exports suggests stronger performance in the near future. July numbers from US consumer and factory surveys suggests greater optimism, which is a pretty good leading indicator for Malaysian exports. Europe unexpectedly surfaced out of recession in 2Q2013, earlier than expected, while Japan is showing stronger growth as well. We should at the very least see export values rising as prices of oil and other commodities rose in the last couple of months.

Technical Notes:

July 2013 External Trade Report from Matrade